Potential Middle Distillate Supply and Demand

In response to a congressional request, GAO reviewed: (1) the potential for a shortage of distillate fuel oils during the 1982-83 winter heating season; (2) the potential for an imbalance between the demand and supply of middle distillates during the 1980's; and (3) the Federal Government's monitoring of middle distillate trends.

Based on available U.S. refinery capacity and Department of Energy (DOE) projections and assumptions for the 1982-83 winter, nationwide distillate fuel oil supplies will be adequate to meet the short-term, winter needs. However, local shortages are possible because of the levels of prewinter distillate fuel oil stocks. As of November 26, 1982, there were about 178 million barrels of fuel oil at the Nation's major storage facilities, or 11 percent less than the amount of reserve stock at this time last year. If the oil industry achieves its 1984 refinery expansion goals, it will have the equipment needed to process the anticipated heavier, higher sulfur, crude oils which will be available during the 1980's. The equipment expansions needed by 1984 are small in relation to the capacities of equipment on hand. DOE fiscal year (FY) 1982 and anticipated FY 1983 middle distillate supply and demand monitoring and reporting activities provide Congress with the capabilities to discern national and regional trends. However, DOE collects limited current data on State and local petroleum supply and demand. GAO stated that, without this information, DOE cannot anticipate potential local distillate supply problems.